China approves reforms of three policy banks

BEIJING: China has approved plans to reform three state-owned policy banks, outlining separate priorities for their opening up, in an attempt to boost the country's economy which faces an increased downward pressure.

The plans have been approved for the China Development Bank (CDB), the Export-Import Bank of China or the China Exim Bank), and the Agricultural Development Bank of China (ADBC).

The CDB must stick to its positioning as a "development financial institution," while the China Exim Bank must build itself into a "policy bank with sustainable development capacities" and the ADBC must become an "agriculture policy bank with sustainable development capacities," three separate statements said.

China is facing increasing downward pressure, worse than many had expected. As recently as 2012, the International Monetary Fund, among others, forecast that annual growth above 8 per cent would continue until 2017.

Last year, China's economy, however, grew at its slowest pace since 1990. It has cut its growth target for 2015 to 7 per cent, which would be the slowest expansion in more than two decades.

According to an official statement, the CDB must adapt to the market and internationalisation to improve development- oriented financial operation models and play its key role in stabilising economic growth and restructuring, state-run Xinhua news agency reported.

Set up in 1994, the CDB has been primarily responsible for raising funding for large infrastructure projects.

The China Exim Bank must play its role in stabilising growth, restructuring, boosting exports and implementing the "going-out" strategy, the statement said.

Set up in 1994, the bank has been working to promote foreign trade and investment.

It said the ADBC must keep policy-oriented businesses as priorities and distinguish between policy-oriented businesses and self-operated businesses in accounts, responsibilities and risk compensation systems.

Set up in 1994, the bank has been serving agriculture and the rural economy.